state tax withheld for nonemployee compensation on form 1099-misc

[misskeiko]

Hello,

Where should i put state tax withheld for nonemployee compensation in lacerte? I entered nonemployee compensation in scedule C. Should i record the state tax withheld under 14.1 Misc income-tax withheld?

Thank you!

[itonewbie · Accepted solution]

Yes, make your input on Screen 14.1 but not on that main screen.  Instead, you need to click on the button for Form 1099-MISC for E-File Returns to fill out all the details.

The income you enter there will not flow anywhere but the SIT will flow to the respective state return.  Make sure you do not enter the SIT from that 1099-MISC anywhere else.  Otherwise, that same SIT will be duplicated.

[misskeiko]

Okay! I have two questions.

1. Do i only enter the 1099-misc form with state tax withheld? All the other forms only have nonemployee compensation and i already dropped them in schedule C(including the one with state tax withheld).

2. the client is in ca but the state tax withheld on 1099-misc was for minnesota and it says "nonresident entertainer tax" on the top of 1099-misc. is this 1099-misc still taxable under CA? does the client need a MN return?

Thank you!

[itonewbie]

NP, @misskeiko.

1. You should enter all the details.  If, however, the only tax withheld is MN NR Entertainer Tax, see #2.

2. I didn't check but don't believe Form ETR is available in Lacerte.  If that is correct, there is no reason to enter the MN NR Entertainer Tax withholding on that screen for purposes of e-filing.  You may want to do a bit more research but it would appear that FTB may not allow OSTC for MN NR Entertainer Tax because it is not a gross rather than net income tax.

[misskeiko]

Hello,

In lacerte, it says " form 1099-misc is required in the e-file if state withholding is present for AZ, CO, CT...". Is that means I do not need to enter other states' 1099-misc in the "form 1099-misc for e-file return" input screen?

I did a little research and found that "Regular Minnesota income tax does not apply to entertainers who are residents of other states and perform in Minnesota. Instead, their earnings are subject to Minnesota’s Nonresident Entertainer Tax. This tax is 2 percent of the gross compensation received by a nonresident entertainer or entertainment entity." The MN state income tax withheld is exactly 2% of the gross compensation. So I think I don't need to report this in lacerte? Also, if the client is resident of CA, should he pay CA state tax for this part of compensation? Thanks!!

[sjrcpa]

CA taxes all income of a CA resident.

[misskeiko]

Thanks!